733859 SIP myths you must know!

Road assets worth Rs 1.6 lakh crore will be monetised over the next four years, as per the recently announced National Monetisation Pipeline. The ministry of road transport and highways along with the National Highway Authority of India will implement the process to monetize over 6,600km of highways each year between FY 2022 and FY 2025. An aggregated road asset of 26,700 km will be monetised according to the NMP document. This is 22% of the total national highways (NH).

The NH monetisation plan will be implemented by bringing all the existing road projects and forthcoming contracts under one umbrella. The assets for monetisation will include the existing NHs that are currently operational and those which will be completed in the next four years, according to a report in the Business Standard. This will be based on the list of stretches received from the ministry of road transport and highways along with secondary research on the possible monetisation of other NHs and road assets, as per the NMP document.

The potential monetisation model

The potential models of road assets monetisation would include Toll Operate Transfer (ToT) and Infrastructure Investment Trust (InvIT), NITI Aayog CEO Amitabh Kant said, as per a media report. According to the NMP document, the NHAI InvIT issue will be privately placed and around Rs 5000 crore will be raised from the current tranche, the report added.

The Build Operate Transfer (BOT) projects that are usually awarded under Public-Private Partnerships (PPP) have been excluded owing to tolling rights on them being retained by the private sector for the respective concession period.

Experts are of the opinion that the mix of brownfield and greenfield projects that will be offered by NMP will lead to a boost in the investor confidence for the sector. If an investor is keen on participating in a future road project, it shows that the sector is robust healthwise.